Gasoline Prices, State Gasoline Excise Taxes, And The Size Of Urban Areas

James M Mcgibany

doi:10.19030/jabr.v20i1.2193

Abstract

<h6 style="page-break-after: auto; text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: widow-orphan;">A monocentric model of land use that assumes urban spatial size is determined by a set of exogenous variables is employed to test the hypothesis that urban land size is negatively related to gasoline prices.&nbsp; Using a model from Brueckner and Fansler (1983), the amount of urbanized land area is shown to be a function of population, income, agricultural land prices and commuting costs.&nbsp; The latter is measured as the price of gasoline, broken into two components; the amount of any state gasoline excise tax imposed plus the total price paid by consumers minus such a tax.&nbsp; Using 1990 data, an empirical model that defines the dependent variable as the average-sized urban area in each state is estimated.&nbsp; The results confirm that higher levels of population and income contribute to larger amounts of urbanized land area, while higher land prices are primarily associated with smaller urban size.&nbsp; Of importance to this study, the results indicate that states with higher gas prices, mainly due to increased state gasoline excise taxes, are associated with smaller urban size.</h6>

Highlights

PThe rapid spatial expansion ofurban areas, popularly referred to as urban sprawl, has been analyzed extensively
All variables are converted to natural logs with the exception of the percentage of commuters using public transit, the price of gasoline and its components, and the average size of urban areas in the state
Given the theory of the previous section and the above assumptions, the empirical model is first specified as size of the urban area (SIZE) = (30 + (31In(URBPOP) + (32In(INCPCAP) + (33In(LANDP) + (34PGASTOT + (3sTRANSIT + e2 (2)

Summary

Introduction

PThe rapid spatial expansion ofurban areas, popularly referred to as urban sprawl, has been analyzed extensively. An important part ofthe research in this area analyzes the costs and consequences ofurban sprawl on society This includes issues regarding increased commute times, higher levels ofair and water pollution, and the loss offarmlands and wetlands, all ofwhich can be considered increases in negative externalities or loss ofamenities that are related to urban sprawl. The model used here builds upon the work of Brueckner and Fansler (1983) which showed that urbanized land area is determined by factors such as population, income, agricultural land prices near urban areas and variables that represent commuting costs. They showed that for medium-sized metropolitan areas, higher income and population ii'. The empirical results are reported in fourth section, while the fmal sections offer concluding remarks and suggestions for future research

Background

Empirical Model And Data Definitions

Results

Conclusion

Suggestions For Future Research